Zhang Xiao’an outlined to Ynet the Chinese perspective on the slump in ties between the US and China. She mentioned that in several occasions, China’s ties with new American president usually don’t start off so well, but gradually improve with time.

She said that now, there is an opposite process – after Obama was elected last year, ties between China and the United States got off on the right foot, and ever since the recent developments have been deteriorating. . . .

Obama declared on his first day in office that he plans to boost ties with China, and went so far as to say that by the end of 2009, the situation would be “better than ever”.

Yep, another broken promise from the man that evidently can’t even live up to the achievements of Nixon, a president that resigned rather than risk impeachment. Hmmm, wouldn’t it be nice if history repeated itself?

Each year, the state-owned monthly magazine Xiaokang and China’s largest portal, sina.com, conduct an online survey to “measure the overall credibility of Chinese society”. In this year’s survey 3,376 netizens were interviewed. The most startling finding: Chinese people trust prostitutes more than they trust politicians:

. . . Chinese netizens say that farmers, religious workers, sex workers, soldiers and students are the five most trustworthy groups among 49 different categories they were asked about. And 91.1% of those polled either have doubts, or disbelieve the government’s economic data. . . .

The sex workers are surprisingly prominent on this list of honor, which was released in Xiaokong’s August issue. A China Daily editorial said Tuesday, “A list like this is at the same time surprising and embarrassing.” The sex business is illegal in China, but ubiquitious. . . .

Xiaokang’s credibility survey also showed that Chinese people’s confidence in the government declined drastically over the past three years. Based on the findings, 91.1% of the respondents said they took all sorts of government statistics as reference, and some of them thought the data was partially faked, while some said they never believe government figures. The reading surged sharply from 79.3%, showing the government has a drastic, and worsening, credibility problem.

Now China’s largest city, Shanghai, is ignoring national policy and encouraging couples to have a second child in order to head off another unintended consequence of the one-child policy — a graying population. One in five Shanghai residents are seniors. Projections place that ratio at 1 in 3 by 2020 and by 2050 there may be more Chinese seniors than the entire population of Americans today.

Implications? China is now enjoying a demographic dividend. Since the 1970s, China’s working population has grown much faster than its total population. Add in dramatically rising productivity from economic reform and the inevitable consequence has been a sharp improvement in per-capita income and living standard that even the global recession has been able to brake but not halt.

Sometime in the next decade that process will reverse. China’s working population will begin to grow more slowly than its total population. The demographic dividend will become a demographic tax.

Another consequence: For the past three decades China has had a demographic bias toward trade surpluses–working population is a proxy for production, and when it grows faster than the total population (a proxy for consumption) the difference becomes exports. But over the next three decades, China is likely to have a demographic bias toward trade deficits instead.

The amended Shanghai Population and Family Planning Rule enacted in April 2004 identified nine types of urban couples and 12 types of rural couples eligible for a second child.

Examples include when both spouses are from a one-child family and one spouse is from a one-child family and the other has rural residency.

Divorced Shanghai residents are allowed a child with a new spouse if one spouse has no child and the other has one or two children from the previous marriage. Both spouses having one child in the previous marriage are also allowed to have one child if they are both from one-child family.

Couples with one disabled spouse whose ability to work is impaired can also have more than one child.

That is what happens when you put bureaucrats in charge of reproduction. Thankfully, America has not yet descended to the point where Congress has any say in the matter.

Outsourcing has hit the hub of China’s Pearl River Delta, with soaring costs pushing the world’s longtime workshop for low-cost goods to move its factories overseas.

Rising raw material and energy prices, the strengthening of the yuan against the dollar and new business regulations are forcing labor-intensive factories — particularly those in the footwear, toy and clothing industries — to hunt for rock-bottom production costs elsewhere.

Many are choosing to move abroad to low-cost countries such as Vietnam and Indonesia, while others are seeking cheaper places to do business in China.

Don’t look for the Chinese manufacturing lock on America to fall apart anytime soon, but this is a move in the right direction.

China holds $1.33 trillion in foreign reserves and is threatening to liquidate its US treasuries if Washington follows through on plans to imposes trade sanctions to force a yuan revaluation. Estimates put China’s US bond holdings at over $900bn.

“China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.

“China is unlikely to follow suit as long as the yuan’s exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar,” [He Fan, an official at the Chinese Academy of Social Sciences] told China Daily.

Chinese state media describes this action as China’s “nuclear option”, which is pretty close to the truth. Liquidation of a billion dollars of bonds could possibly crash the dollar, causing a US recession and wreaking havoc on the global economy.

Threatening to execute this plan is blackmail. Actually doing it is nothing less than economic terrorism.

Favored Trade Partner wasn’t enough for them — they manipulate the value of their currency so as to come out on top in trade:

China pegs the yuan to the dollar at a fixed rate and strictly regulates imports and the allocation of foreign exchange. In order to maintain the yuan’s fixed value, China must create a residual supply of yuan to counter growing demand for its currency; China achieves this by buying dollars in foreign exchange markets. Between December 2000 and July 2003, China more than doubled its foreign reserve holdings from $168 billion (16% of its GDP) to $361 billion (31% of its GDP).

Had we confronted China in the 90s we wouldn’t be in this situation. We don’t negotiate with terrorists, and we shouldn’t let this deplorable situation continue. It’s time to stop kowtowing to China. Tell your representatives and senators to grow a pair and impose strict trade sanctions on China.

Almost all of the most religiously free countries are culturally Christian in background.

Marshall also pointed out that some tyrannies, and their apologists in the West, prioritize “economic rights” and supposed “Asian” and “Islamic” values over religious freedom for individuals. But non-Western and historically poor countries such as Mongolia, Thailand, Mali and Senegal have achieved relative religious freedom, without sacrificing their culture or their religion. “It is a moral travesty of the highest order to maintain that because people are hungry or cold it is legitimate to repress their beliefs as well,” Marshall riposted.

Today China executed the former head of the State Food and Drug Administration, Zheng Xiaoyu, for corruption (ht to Say Uncle). His secretary, Cao Wenzhuang, was recently sentenced to death with a two-year reprieve.

Zheng was sentenced to death in May for taking bribes to approve an antibiotic blamed for at least 10 deaths and other substandard medicines. Cao was given a death sentence last month with a two-year reprieve for accepting bribes and dereliction of duty.

Such suspended death sentences usually are commuted to life in prison if the convict is deemed to have reformed.

Zheng’s death sentence was unusually heavy even for China, believed to carry out more court-ordered executions than all other nations combined, and likely indicates the leadership’s determination to confront the country’s dire product safety record.

I am pleased to hear that China is taking extreme measures to improve their product quality. Even though I try to avoid buying products made in China, sometimes I can’t avoid it; more often, I just don’t know.

Some would say that execution is a too-harsh sentence for merely turning out substandard products. Some would say not. I am among the latter.

These were among the 107 food imports from China the Food and Drug Administration detained at U.S. ports just last month, agency documents reveal, along with more than 1,000 shipments of tainted Chinese dietary supplements, toxic Chinese cosmetics and counterfeit Chinese medicines.

And we are about to make matters worse by allowing the importation of chickens from China. Worse still, you won’t even know which chickens are imported because the law doesn’t require that particular piece of information be communicated to you. If it were up to me, everything imported that you purchase would have a warning label right there on the package, printed in big bold letters just like the Surgeon General’s warning on a pack of cancer sticks.

Our children play with toys made in China. We are eating and drinking ingredients from China every day. We are putting our families in cars that travel at high speed, riding on tires made in China.

Here’s what happened to my tire last Sunday, as I was driving my son, daughter-in-law and two small grandchildren to the airport in Little Rock:

This was a catastrophic failure that happened at 70 MPH on a crowded interstate with cars, trucks and semis all around us. I began braking and moving onto the shoulder as soon as the failure happened, but the outside of the tire rolled past us before I was even stopped. Was this particular Bridgestone tire made in China? Actually, I don’t think so. At least I can’t determine the origin through web research. [And I had to include the pic as it was the original inspiration for the post.]

But 450,000 tires recently sold by a New Jersey company that were manufactured in China are missing the gum strip that keeps the steel belts from separating from the rubber tire. When such separation occurs a catastrophic failure just like the one pictured above takes place.

The mandatory recall will bankrupt the company, which estimates that it only has enough funds to replace about ten percent of the tires that it sold. The manufacturer in China will not contribute to funding the recall, so the American consumer is left holding the bag rotten tire. How many drivers will voluntarily throw away a new set of tires? I’m guessing very few, leaving over 100,000 unsafe cars on our highways.

Poisonous foodstuffs. Unsafe products. When will it stop?

Epilogue: One final personal note before I go. Can you identify this tire-related tool?

It is the hook that goes onto a scissor jack used to change a tire. It came with my American Dodge Durango. The hook that you are look at twisted off like cheap pot metal. I can’t prove it, but I’m betting that particular piece of crap was manufactured in China.

To deal with an out-of-control population boom, China instituted its one-child policy in 1980. This resulted in millions of baby girls being left to die because young couples wanted to have boy children — for both cultural and economic reasons (children traditionally support their family elders during the “golden years”).

But it has also resulted in a looming crises: there are currently six workers for every retired person in China. By 2040, this ratio is expected to reach two to one:

The proportion of elderly people is growing faster in China than in any major country, with the number of retirees set to double between 2005 and 2015, when it will reach 200 million. By midcentury, 430 million people — about a third of the population — will be retirees. That increase will place enormous demands on the country’s finances and could threaten the underpinnings of the Chinese economy, which has thrived for decades on the cheap labor of hundreds of millions of young, uneducated workers from the countryside.

One possible path to ease pressure on the pension system is to raise the retirement age from 50 for women and 55 for men to 55 and 60 respectively. But that will only exacerbate yet another problem: of the 4.13 million college graduates last year, 30 percent are still unemployed.

Which poses a question: will China try to avoid a war with the West at all cost because it cannot afford to lose any of their youthful resources, or will they push a nuclear confrontation because WMD isn’t age discriminatory?

Claudio Abramo, of the non-governmental organization Transparencia Brazil, said the numbers also were a worrying indication of corruption at local and regional levels of government.

Gee, ya think?

Villagers are puzzled by the Chinese government’s decision to paint a mountain green. Theories range from improving the area’s feng shui to the government wishing to appear more “green” — the barren mountain used to be a rock quarry.

When a man fails to help out around the house, his poor performance might be related to a subconscious tendency to resist doing anything his wife wants, a new study suggests.

We’ve known for a while that our desks and computer keyboards are little germ factories. But now we find that women’s work spaces have four times the bacteria than their male counterparts. My childhood best friend was right — women are gross!

Microsoft released the first security fix for Vista on patch Tuesday. This one is especially ironic for the OS billed as the “most secure ever”: the hole allows someone to take complete control of your computer.

Day by Day

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